Question

Find the principal needed now to get the given amount; that is, find the present value.To get $800 after 4 years at 9% compounded quarterlyThe present value of $800 is $(Round to the nearest cent as needed.)

Answer 1

1) Since this is a compound interest investment, we can write out the following, assuming that there will not be any other investment on this during those 4 years.

2) So, we can write out the following formula:

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ 800=P(1+(0.09)/(4))^(4*4) \\ 800=P(1+(0.09)/(4))^(16) \\ 800=P(1.0225)^(16) \\ P=(800)/((1.0225)^(16)) \\ P\approx\$560.37 \\ \end{gathered}`

Thus this is the answer